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Iraq sees drought cutting wheat crop

Baghdad, July 19, 2011

Iraq expects drought will cut its 2011 national wheat harvest to 1.75 million tonnes, below expectations and lower than 1.866 million tonnes produced last year, Hassan Ibrahim, Iraq's grain board chief told Reuters in an interview on Monday.

"Weather conditions and the drought that hit the (northern) areas were the main reasons. Rains came late," he said.

Iraq's agriculture minister and officials had said they expected the wheat harvest for 2011 to reach between 2 million tonnes to 2.5 million tonnes based on good weather earlier in the year.

Iraq is one of the world's largest grain importers, supplying a large public food ration programme. It consumes 4.5 million tonnes of wheat and 1.2 million tonnes of rice a year, most of it imported.

The northern areas around Mosul and Arbil are Iraq's wheat producing heartland and has been hit by drought this year.

Ibrahim said Iraq plans to issue a tender on Tuesday to buy 100,000 tonnes of wheat from any origin.

He said Iraq has bought enough rice from the contracts to cover its requirements for 2011. "We have imported the required quantity and have signed contracts to ensure the staple until the year end," Ibrahim said.

Last month, officials said they had expected Iraq to produce an annual harvest of 4 million tonnes of wheat in three years time and be able to cover domestic demand, based on the new irrigation plans across the country.

Iraq's agriculture ministry is boosting efforts to encourage farmers to use new irrigation methods to reduce the use of exploited water and help trim water shortages and combat drought.

Iraq's Nineveh northern province, the biggest wheat producer has output at only 119,000 tonnes so far this year compared with 400,000 tonnes during the same period last year, Ibrahim said.

Iraq will continue issuing wheat tenders until it makes up for the shortages during 2011, he said. Wheat prices in Iraq are the highest among neighboring countries as the government works to encourage farmers to grow more wheat. This year the grain board paid $615 per tonne to local farmers for their produce.

Ibrahim said the government recently bought Uruguayan rice in its last tenders because it matched Iraqi tastes and US rice on offer recently had not met Iraqi quality specifications. "This does not mean that we will continue buying Uruguayan rice exclusively, because the tenders we have are open to all origins," Ibrahim said.

Iraq's own rice production is not enough to cover its demand for one month. Ibrahim also said he expected global wheat prices to fall after Russia, one of the big exporter of rice, lifted a year- long ban on exports on July 1. - Reuters